Last week the U.K. Serious Fraud Office (SFO) received some rare, yet good news when the jury convicted former UBS trader Tom Hayes for criminal conduct for his role in the manipulation of LIBOR. The unanimous jury verdict was followed by an equally dramatic 14-year prison sentence handed down by the trial judge. This sentence was one of the harshest penalties against a banker since the financial crisis and it was the first criminal conviction of an individual for manipulation of LIBOR on either side of the Atlantic.
Barrry Vitou, a partner at PinsetMasons in London and a co-founder of the widely read U.K. Bribery Act blog site, thebriberyact.com said that the trial court victory, significantly increased the SFO’s viability and to paraphrase Mark Twain, reports of the SFO’s demise were greatly exaggerated. Vitou said, “The narrative needs to shift now, not to talk of shutting [the SFO] down, but to talk of entrenching its position. The Tom Hayes guilty verdict has global significance.”
However, even the head of the SFO, David Green admitted the Office is still embattled despite the conviction of Hayes. Green was quoted as saying that there was “certain professional satisfaction” at the conviction of Hayes for the SFO. Moreover, he noted that “Plainly, it was a very important one. It was the biggest investigation we have ever done.” Yet when Green was questioned directly about the uncertainty of the future of the SFO, he stated, “Yes of course there is. This is ultimately a matter for ministers. It is up to me to make a case for the SFO.”
This future would seem even less clear with the announcement earlier this week from the U.K. government that it is creating a new crime unit to investigate corruption affecting developing countries. This agency is called the International Corruption Unit (ICU) and according to a U.K. government’s press release, “The new International Corruption Unit brings together existing investigation and intelligence units funded by the Department for International Development from the Metropolitan Police Service, City of London Police and National Crime Agency. The multi-agency team will be operated by the National Crime Agency and be the central point for investigating international corruption in the UK.”
The statement did not mention the SFO or how the new ICU will divvy up the work with the SFO. Vitou, however, noted that “every six to 12 months there are rumors that Theresa May, [ the U.K.’s Minister of Justice] wants to shut it [the SFO] down.” Director Green has indicated that several large investigations are in the pipeline yet that has not stopped the SFO’s critics. So even with the conviction of Tom Hayes, the SFO appears to still be under fire in the UK.